Trident Microsystems Comments on Wall Street Journal Report Regarding Stock Options
Monday May 22, 8:19 am ET
SUNNYVALE, Calif., May 22 /PRNewswire-FirstCall/ — Trident Microsystems, Inc. (Nasdaq: TRID – News) announced that as of last Friday afternoon, May 19, 2006, we became aware of a stock option pricing practices article to be published today in the Wall Street Journal which mentions the Company. The article discusses a survey of previous stock option grants from 1995 to 2001 of several companies including Trident Microsystems and, using statistical probabilities, questions the timing of certain stock option grants. To our knowledge, the article relies on a survey of SEC filings going back 5-10 years when the Company was still a struggling graphics chip enterprise with a market value substantially less than what it is today. The article then uses statistical assumptions and draws a set of inferences around the timing of certain stock option grants to officers during that period. The Company noted that its executive officers did not exercise the specific stock options being discussed in the article for an average of approximately seven years after the date on which they were granted and during certain portions of the intervening period, these options were “under water” (i.e. of little value — the underlying stock was trading below the option exercise price). Other than the implications of the statistical analysis, the article does not offer any evidence of wrong doing.
The Company has referred this matter to the Audit Committee for review. During 2004, the Company had also received and responded to an SEC inquiry regarding its stock option grants to executive officers for a period from 2000 to 2004. The Company will have no further comment on this matter until the Audit Committee completes its review.
About Trident Microsystems, Inc.
Trident Microsystems, Inc., with headquarters in Sunnyvale, California, designs, develops and markets digital media for the masses in the form of integrated circuits (ICs) for HDTV, LCD TV, PDP TV, DLP TV, and DCRT. Trident's products are sold to a network of OEMs, original design manufacturers and system integrators worldwide. For further information about Trident and its products, please consult the company's web site: http://www.tridentmicro.com.
NOTE: Trident is a registered trademark of Trident Microsystems, Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice.